On August 7, the trucking company Yellow announced that it would be closing after almost 100 years in business, meaning their 30,000 truckers would be laid off. The news came after one of the country’s oldest and largest trucking companies filed for Chapter 11 bankruptcy protection.
It’s with profound disappointment that we are closing after nearly 100 years in business. Today, it’s not common for someone to work at a company for 20,30, 40 years, but many at Yellow did. For generations. We provided solid, good-paying jobs and fulfilling careers. pic.twitter.com/yLPC4BBKah
— Yellow (@Yellow_Trucking) August 7, 2023
Rick McQuaide, the owner of a freight company in Cambria County, Pennsylvania, sees firsthand what the recession is doing to truck companies.
McQuaide stated that the trouble began during the Covid-19 pandemic when people started overspending due to receiving stimulus checks from the government. To keep up with the demands, his company bought new trucks to keep up with consumer demands.
Now that the economy has slowed down, freight businesses like McQuaide’s are seeing the aftermath. He reported that his company’s rates have decreased by 20%.
The trucking industry has not only seen inflation and operating costs increase, but wages for truckers decrease due to consumers not spending as much as they used to.
McQuaide believes that many Americans are unaware of how problematic the freight issue is.
“In my opinion, this industry is heading in the wrong direction,” he said, “and when trucking and supply chain freight is heading in the wrong direction, so is the country.”
According to McQuaide, we can predict the health of the economy by looking at the trucking industry, along with any other form of transportation.
“That is what we are seeing on the freight side, and that is not a good omen for the U.S. economy. That spending had kept us out of a recession,” he said. “Now that consumers are pulling back, we should be paying more attention to what that means.”
It was reported that many households have been irresponsibly spending their money, forcing them to tap into shrinking savings accounts and putting more charges on their credit cards.
During the pandemic, consumers were more willing to purchase big items, such as refrigerators, dishwashers, and stoves, increasing the freight industry’s need for more trucks and drivers.
As long as consumers have the mindset of rethinking big purchases, the trucking industry can continue to expect more companies to file for bankruptcy, leaving the future uncertain.